Virginia Subordination Nondisturbance and Attornment Agreement

• Category: Landlord Tenant - Subordination
• State: Multi-State
• Control #: US-0734-WG
• Format: Word; Rich Text

Description

Subordination Nondisturbance and Attornment Agreement A Virginia Subordination Nondisturbance and Attornment Agreement, commonly referred to as an SN DAA, is a legal document often utilized in commercial real estate transactions. This agreement outlines the rights and obligations of three parties involved: a tenant (the occupant of the property), a landlord (the property owner), and a lender (a financial institution that holds a mortgage on the property). The purpose of this agreement is to establish the priority of rights and claims should the property go into foreclosure. It is typically executed when the lender is providing financing for the property, and the tenant wants assurances that their lease agreement will remain intact and will not be disturbed in the event of default by the landlord. The agreement consists of three key provisions: subordination, non-disturbance, and attornment. 1. Subordination: In this provision, the tenant agrees that their leasehold interest in the property is subordinate, or inferior, to the lender's mortgage. This means that if the property goes into foreclosure, the lender's rights take precedence over the tenant's rights. 2. Non-disturbance: This provision provides the tenant with protection against eviction or lease termination in case of a foreclosure. The lender agrees not to disturb the tenant's right to occupy the premises as long as the tenant is in compliance with their lease obligations. Non-disturbance ensures the tenant's lease remains valid and enforceable even if there is a change in ownership of the property. 3. Attornment: This provision states that if the lender assumes ownership of the property through foreclosure, the tenant will recognize the lender as the new landlord and continue paying rent to them. The tenant agrees to "attorn" or accept the new landlord's authority. This provision smoothens the transition in ownership and ensures the lender has a tenant in place to generate income from the property. Different types or variations of SN DAA may exist depending on the specific terms negotiated among the tenant, landlord, and lender. For instance, there could be variances in the subordination clause where certain rights or claims of the tenant are preserved, or there might be additional obligations imposed on the lender to maintain and repair the property. In summary, a Virginia Subordination Nondisturbance and Attornment Agreement is a legally binding document that safeguards the rights of tenants in commercial real estate transactions. It establishes the priority of claims in the event of foreclosure, provides tenant protection against disturbance or eviction, and ensures rent payment continuation under new ownership.

A Virginia Subordination Nondisturbance and Attornment Agreement, commonly referred to as an SN DAA, is a legal document often utilized in commercial real estate transactions. This agreement outlines the rights and obligations of three parties involved: a tenant (the occupant of the property), a landlord (the property owner), and a lender (a financial institution that holds a mortgage on the property). The purpose of this agreement is to establish the priority of rights and claims should the property go into foreclosure. It is typically executed when the lender is providing financing for the property, and the tenant wants assurances that their lease agreement will remain intact and will not be disturbed in the event of default by the landlord. The agreement consists of three key provisions: subordination, non-disturbance, and attornment. 1. Subordination: In this provision, the tenant agrees that their leasehold interest in the property is subordinate, or inferior, to the lender's mortgage. This means that if the property goes into foreclosure, the lender's rights take precedence over the tenant's rights. 2. Non-disturbance: This provision provides the tenant with protection against eviction or lease termination in case of a foreclosure. The lender agrees not to disturb the tenant's right to occupy the premises as long as the tenant is in compliance with their lease obligations. Non-disturbance ensures the tenant's lease remains valid and enforceable even if there is a change in ownership of the property. 3. Attornment: This provision states that if the lender assumes ownership of the property through foreclosure, the tenant will recognize the lender as the new landlord and continue paying rent to them. The tenant agrees to "attorn" or accept the new landlord's authority. This provision smoothens the transition in ownership and ensures the lender has a tenant in place to generate income from the property. Different types or variations of SN DAA may exist depending on the specific terms negotiated among the tenant, landlord, and lender. For instance, there could be variances in the subordination clause where certain rights or claims of the tenant are preserved, or there might be additional obligations imposed on the lender to maintain and repair the property. In summary, a Virginia Subordination Nondisturbance and Attornment Agreement is a legally binding document that safeguards the rights of tenants in commercial real estate transactions. It establishes the priority of claims in the event of foreclosure, provides tenant protection against disturbance or eviction, and ensures rent payment continuation under new ownership.